Fundamentals of Service Marketing (MBA 343M)

CIA 1

A Report submitted in partial fulfillment of the requirements for the degree of

Master of Business Administration

By

Antony George - 1827605

Gaurav Kharayat – 1827612
Prateek Gupta – 1827623
Rishabh Ranjan – 1827625
Saumya Deogun – 1827654
Soumya Singh – 1827657

Under the Guidance of

Prof. Saba Fatma

Institute of Management
CHRIST (DEEMED TO BE UNIVERSITY), Bengaluru
January 2019
 TABLE OF CONTENTS

S. NO. TOPIC PAGE NO.

1 Product 1
2 Price 2
3 Promotion 4
4 Place 6
5 People 8
6 Process 9
7 Physical Evidence 10
8 References 11
PRODUCT:

A Product is a bundle of utilities, an item that

is produced to satisfy the needs of certain
group of people. A product can be tangible or
intangible as it can be in the form of goods or
in the form of services. The product in service
marketing is heterogeneous, perishable and
intangible in nature and thus has to be
designed with care to increase customer satisfaction. Therefore, service products cannot be
measured in terms of look, feel and other qualities present in a commodity. Education industry or
the tourism industry can be an excellent example. The following are the products of Onn Bikes

ROYAL ENFIELD BAJAJ HONDA YAMAHA KTM

▪ HIMALAYAN411C ▪ DOMINAR ▪ CBR 150 ▪ FZ ▪ DUKE

C 400 ABS ▪ HORNE 250
▪ 500 CLASSIC ▪ PULSAR NS T
▪ CONTINENTAL GT 200 ▪ DIO
500 ▪ PULSAR NS ▪ ACTIVA
▪ 350 THUNDERBIRD 160 ▪ LIVO
▪ 350 CLASSIC ▪ AVENGER ▪ NAVI
220 STREET ▪ DREAM
▪ AVENGER NEO
220 CRUISE
▪ PULSAR 180
▪ PULSAR 150
▪ PULSAR 13
LS
▪ CT 100

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 PRICE:
Price is an important element in the marketing
mix of a firm that brings revenue to the business.
Organizations should use a sophisticated
approach to pricing. While pricing the services
shifts in demand, the rate at which supply can be
expanded, prices of available substitutes etc.
should be taken into consideration.

ONN Bikes aims to adopt a market penetration

pricing scheme which offers the rental bikes at
the lowest possible rates in the market and thereby eliminating competition. This pricing strategy
will be initially followed across all the four segments.

4 segments of ONN Bikes are :-

Non Geared Scooters (Honda deo, Honda Activa )

KTM and Dominar
Royal Enfield
All Other Bikes ( Honda Hornet, Bajaj Pulsar ,TVS RTR, Yamaha)

Cancellation Cancellation made more than 6hrs before booking start: Rs100
Cancellation made within 6hrs of booking is 50 % of Booking Fee
Cancellation made within 2hrs of booking time is 75% of the Booking Fee
Cancellation made after booking has started: No Refund

Reschedule before Modifications made more than 6hrs before booking start: Rs50
start Modifications made within 6-2 hrs. of booking start: Rs50 or 10% of the booking
(which so ever is greater)
Modification made within 2-1 hrs. of booking start: Rs100 or 20% of the booking
(which so ever is greater)

Extension Charges Extension before start time: Rs50 extra plus the normal charges for the period
extended
Extension post start time: Rs250 extra plus the normal charges for the period
extended
Extension charges should be paid either in cash or through online payment

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Late Return Non Geared Scooters: First 2 hours of delay would be charged at Rs100 + hourly
rates.
KTM and Dominar: First 2 hours of delay would be charged at Rs300 + hourly
rates.
Royal Enfield: First 2 hours of delay would be charged at Rs250 + hourly rates
Post 2 Hours, on weekdays subsequent hourly charges will be applicable

Extra km charges After the exhaustion of free kms, the following charges are applicable:
For KTM and Dominar : Rs4/km
For Royal Enfield and Honda CBR: Rs3/km
For Bajaj Avenger: Rs2.5/km
For all other vehicles: Rs2/km

Penalties that can be applicable if rider violate the above mentioned terms

Traffic and Parking violations Full payment of fines + Rs500 per 30 days late in payment

No Show Bookings would be cancelled if after 4 hours of booking start

time the customer still doesn’t show up and refunds would not be
applicable

Over speeding >= permissible limit Initially two warnings, then charged at Rs 200 for over speeding
for that segment 3rd time. Beyond 3rd warning a Penalty of Rs 500 is charged
(over and above any government fines that may have been
levied)

OVERSPEEDING LIMITS
Non Geared Scooters: 75km/hour
RE, CBR and Avenger: 100km/hour
KTM and Dominar: 110km/hour
All Other vehicles: 90km/hour

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PROMOTION :
Service sales promotion is a strategy by a company, designed to maximize its sales by motivating
the use or trial of a service. Promotion is part of the marketing business. There are different types
of service sales promotion. But they all target on pushing individuals to buy the product or
become a client of the business. The companies that had tasted success would know that sales
promotion is the best way to maximize sales and develop customer satisfaction. Regardless of
the industry or the size of the business, sales promotion strategies can be used by all for their
benefit with or without the expense of money. The promotion also helps to generate awareness of
the product among the crowd and create brand loyalty.

The types of promotional strategies followed by Onn Bikes are

• Advertising – It involves distributing pamphlets on roadsides, display advertisements in

magazines and radio about the various types of services and its price.
• Public relations or publicity – It is the managing of the spread of information between a
company and an individual. On Bikes do campaigns in colleges and clubs to make
potential clients aware of the product and to bring them the right information and avoid
rumors. E.g. Onn Bikes was the sponsor of Ushus 2018 in Christ college. Which helped
the company do campaign inside the college which has a count of approximately 20000
students.
• Sales promotion – Onn Bikes provide 50% off for the first-time user. And credits 50 Rs
into the customer's wallet for referrals to both parties, which can be utilized while
availing the services from Onn bikes.
• Direct marketing – Onn Bikes send Emails & phone messages to customers who search
for bike rentals on the internet. And provide customized service information depending
upon the information gathered on the individual's requirements.
• Personal selling – Onn Bikes have their sales team who approach potential clients and
make contracts with corporates to avail On Bikes service at a discounted rate. E.g.
Dominos uses On Bikes vehicles to deliver their pizza's at peak intervals when falling
short of a vehicle.
As the company is doing
phenomenally well with its service, a
majority of the clients are satisfied and
seemed to be sharing their experience
with their friends and loved once, thus
word mouth is the major indirect
promotion that the company enjoys
and continue to increase. But the
company does very fewer promotions
in social media such as Facebook &
Instagram which are highly unavoidable platforms for online marketing promotions. Onn bikes

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should have a brand ambassador who can make the crowd trust on the company and its service.
Thus, some known celebrity should be a part of the promotion campaign as people trust the
words of the once they know. It is observed that the major customers of Onn Bike are college
students, thus it would be motivating to the students if the company provides discounts for
college students upon display of their ID cards for validation. This will attract more college
student to avail the service as well as motivate already existing college student customers to avail
frequent services.

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PLACE :
Place in the services tells about the appropriate locations for providing services so that a firm can
utilize its potential to deliver the services on time and could have an effective distribution. A
place determines a company’s potential to provide services at the right time.

Service distribution involve systems involve physical or electrical channels (or both), depending
on the nature of service. ONN bikes, a company that provides an online rental services is one
kind of an information-based services which is delivered almost instantaneously to different
locations with the help of internet access. ONN bikes have its location in cities like Bangalore,
Hyderabad, Jaipur, Mysore etc. and Headquarters at Mumbai. The service can be availed either
through the website or with the help of the application so the company is more of an online
service and then providing the physical access where a customer comes and take the bikes on
rent.

Factors that influence the selection of the mode which basically consists of four factors:

• Vehicle ownership, household structure and income: - These external factors are very
important factors which determines rental services. The benefit of using a rental service
involves lack of vehicle ownership and also people who don’t have sufficient income can
avail the rental services at the right time and the right place.
• Characteristics of movement: - This includes the purpose of the movement, time of the
movement and distance of the movement which states that customers of ONN bikes can
take the rental services at any time and can cover distances as per the will they have and
according make the payments.
• Characteristics of the transportation
mode: - This consists of the travel time,
transportation cost, availability of space, comfort
and reliability. Because of the increase in the
number of vehicles as a result of rising population
has really led to high traffic density so ONN
bikes through the rental services is able to reduce
the travel time and also the convenience it provides to provide the services on location.

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 • Characteristics of a city or zone consisting of a city or zone consisting of distance
from the city center and population density :- Cities like Bangalore which is densely
populated have many rental centers particularly near to the institutes and colleges so as to
target its customers who are mainly the students who don’t have their own vehicles and
even other classes of consumers.

The internet has really reshaped the distribution strategy for many array of industries and since
the ONN bikes is delivering its core services so it is well backed by the real time tools.

Such a kind of service where a customer is engaged in real time from visiting the website to
payment and getting the bike on rent has brought lots of convenience to the company and
therefore get benefited from the services it provides.

Speed and convenience of the place and the time have become important determinants of the
effective delivery of services. Customers are willing to pay extra to save time and getting
convenience of completing their task faster.

ONN bikes has its services availed 24*7 which really helps the company for operating its
channels effectively.

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PEOPLE :
In the area of services, the customers view
people who work at the organization
(employees) to be equivalent to the
services provided by the business. The
experience that customers get upon
interaction with the employees becomes a
standard of the company’s services.
Hence, this implies that employees must
be well trained for satisfactory customer interaction and customer relationship must be an
emphasized part of the company’s process.

The people in the company can be classified into three categories broadly: the people who design
the service, the people who work to improve the service and the people who interact with
customers directly. The designers of the service work at the back end and handle the operations
of the company. They may be managers or application designers. They must ensure their part of
the work assures convenience and ease-of-use to the customer. The people who work to improve
the service are data analysts and market researchers. They analyze present data and give
suggestions to improve processes based on the results. Finally, the people who interact directly
with customers are the main contact points for the customer and company. They mainly work in
customer relationship management and help to solve issues or answer queries during or after the
service has been provided.

Onn Bikes ensures that their app is very easy to use and customer friendly. They have provided
two different options for customers to interact with them on their app platform in case of any
grievances, namely: the live chat option and the customer care telephonic line. Also, once the
customer’s details are confirmed and they reach the pickup site, they are met and guided by an
employee of the company who navigates them through the process and is readily available for
any doubts the customer may have prior to availing the service.

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PROCESS:

The process of providing a service in the service industry is the only consistent and dependable
part of services that a customer will come across. It is extremely crucial since the service process
determines and ensures that customers experience the same service each time. Hence, it becomes
very necessary for any company to introduce an element of standardization in its processes, in
order to give their customers a sense of what to expect when they opt for this company’s
services.

The creation and delivery of services to

customers requires the design and
implementation of highly effective
processes that elaborate the method and
sequence of actions of the service system.
Process works to enhance the customer
experience. Badly designed processes will
lead to annoyed customers, if they experience slow and ineffective service delivery. Similarly,
poor processes make it difficult for front line staff to do their jobs well and result in low
productivity, and increase the chances of service failures.

At Onn Bikes, the process experience is uniquely tailored to give an ease-of-process feel to the
customer. The service is provided through the mobile application, wherein a customer must
register and feed in details regarding when and where they wish to avail the service. They must
upload their identity proof and driving license at this point. Once this part is done the company
contacts the customer after verification of details and confirms availability of the service for the
given time and date. The customer must then simply reach the premises of the service and meet
with an employee who guides them to their vehicle and provides them basic safety material
(helmet) and guidelines.

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PHYSICAL EVIDENCE:

The physical evidence of a services company is the only tangible element in the entire process
that a customer encounter. Thus,
companies must make an effort to provide
a customer –friendly experience in their
service area. For example, in a salon, there
will be comfortable seats and interesting
magazines to read while you wait for your
turn. This provides the customer a sense of
what kind of service to expect from you.

The physical evidence of a service company comprises the following:

• Physical Environment: The space or environment at which the services are provided
• Ambience: The atmosphere of the place which can be designed to promote customer
satisfaction
• Spatial layout: The physical planning of the business premises is designed in a way as to
enhance customer service and experience. Motor bikes are readily available for pickup at
the site.
• Corporate branding: The brand of Onn Bikes boasts a wide range of distinguishing
features for branding, like several time-slots for bike pickup and affordable pricing.

While Onn Bikes has managed a good stand with respect to the other P's, when it comes to
Physical Evidence there is quite some room for improvement. The interiors of the office could be
made more welcoming and informative for the customer. For example they could have a few
posters of motorbikes at the premises as a symbol of the service they provide which would go in
line with their tagline 'Your next ride is here’. They could have some brochures around the store
for informative purposes. However on the contrary, the website and application are quite
informative and do a good job of depicting an element of tangibility by not only allowing the
user to explore services but also the products offered (exclusive merchandise for motorcycle
enthusiasts).

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REFERENCES:-

1. Mudie, P., & Pirrie, A. (2012). Services marketing management. Routledge.

2. Lovelock, C., & Patterson, P. (2015). Services marketing. Pearson Australia.

3. https://www.onnbikes.com

4. https://www.onnbikes.com/policy.html

5. https://www.managementstudyguide.com

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